This case is before the Authority on a negotiability appeal filed by
the Union under section 7106(a)(2)(E) of the Federal Service Labor-Management
Relations Statute (the Statute). The appeal concerns the negotiability of one
proposal providing for a 6 percent across-the-board pay increase under a
five-step pay scale. For the following reasons, we find that the proposal is
nonnegotiable.

Section 704(a) establishes certain bargaining rights for employees "to
whom section 9(b) of [the PRSA] applies." In particular, section 704(a)
authorizes parties who negotiated over a term and condition of employment prior
to August 19, 1972, to continue existing contractual terms concerning that term
or condition of employment or to modify or improve it when negotiating a new
agreement, without regard to restrictions in the Statute. See, for
example, International Brotherhood of Electrical Workers, Local 1245 and
U.S. Department of the Interior, Bureau of Reclamation, Mid-Pacific Regional
Office, Sacramento, California, 43 FLRA No. 94 (1992) (IBEW).
SeealsoUnited States Information Agency v. FLRA, 895
F.2d 1449 (D.C. Cir. 1990) (USIA v. FLRA); U.S. Department of
Interior, Bureau of Reclamation, Lower Colorado Dams Project Office, Parker and
Davis Dams and International Brotherhood of Electrical Workers, Local 640,
41 FLRA 119, 126, order denying motion for reconsideration,42 FLRA 76
(1991) (Parker and Davis Dams).

Under section 704(b), the scope of bargaining established in section
704(a) is modified with respect to the specific category of terms and
conditions of employment described as "pay and pay practices." Parker and
Davis Dams, 41 FLRA at 127. Under section 704(b), employees who negotiated
over pay and pay practices in accordance with prevailing rates and practices
prior to August 19, 1972, may continue to negotiate over pay and pay practices
only in accordance with current prevailing rates and practices. Id. at
128. That is, under section 704(b), current prevailing practices determine
whether, and the extent to which, a specific pay practice is negotiable.
Id.

For the purposes of section 704(b), the term "pay" encompasses the rate
of basic pay for a position held by an employee covered by the provisions of
section 704 of the CSRA. United States Information Agency, Voice of
America, 37 FLRA 849, 859 (1990) (USIA). The term "pay practices"
encompasses matters historically considered part of an employee's compensation
package, including: (1) adjustments to an employee's basic rate of pay; (2)
matters concerning the payment of differentials, overtime, and premiums; and
(3) any other general compensation policies that were entered into and became a
part of the employee's total compensation package. Id. at 861.

III. Proposal

6% across the board (5 steps) raise in wages on total pay
scale.

IV. Positions of the Parties

A. The Agency

The Agency argues that although a five-step pay schedule was negotiated
prior to August 19, 1972, the proposal is nonnegotiable under section 704(b) of
the CSRA because neither the five-step pay scale nor the 6 percent
across-the-board pay increase is a current prevailing pay practice. According
to the Agency, a survey it conducted indicates that: (1) "a multiple five step
pay scale with automatic step increases, . . . is not a currently prevailing
practice in the local industry but, rather, a single base rate is currently
prevailing for each occupation[;]" and (2) "the 6 % increase across the board .
. . is likewise not a prevailing practice in that the percentage adjustment
needed to pay at prevailing rates varies from occupation to occupation."
Statement of Position at 7. The Agency states that the proposal is
nonnegotiable because "the Union failed to show, by current factual data, that
the proposed five step pay scale and the 6% across the board increase are
current prevailing practices in the local industry, and the Agency['s] . . .
current survey shows that the multiple step pay scale and 6% across the board
pay increase are not currently prevailing . . . ." Id. at 9.

B. The Union

The Union asserts that the Agency has "negotiated and agreed to the
5-step schedule for over 20 years." Reply Brief at 6. The Union also asserts
that "the prevailing practice of the contracts since 1972, and the instant
proposal, all reflect federal pay practice." Id. at 8 (footnote
omitted). The Union argues that, because the Agency "has negotiated on the
5-step system, the [A]gency must . . . bear the burden of showing that the
5-step schedule is no longer the prevailing practice." Id. at 7.

The Union maintains that the Agency's survey is "worthless" because the
Agency has not described its methodology or the businesses surveyed. Id.
at 9. Moreover, the Union claims that its proposed pay scale "is similar to the
general private industry pay structures which have two or more steps within
each pay level[]" and "emulates the federal pay practice[.]" Id. at 10.
The Union states that a five-step pay scale "was . . . the prevailing federal
government practice prior to 1972 [which] continues to this day." Id. at
10-11.

The Union further asserts that the five-step pay scale is not pay or a
pay practice, within the meaning of section 704(b) of the CSRA. According to
the Union, the pay scale is merely "a determination as to how a prevailing
practice is to be paid[.]" Id. at 16.

As to the proposed 6 percent pay increase, the Union argues as
follows:

The amount of a negotiated raise rests on a multitude of factors. It
comprehends not only pure economic issues, but also . . . the overall work
environment, encompassing other employee comforts, morale, and job
satisfaction. It does, . . . rely on prevailing rates in industry outside the
immediate company. However, these are clearly such matters as Congress intended
the parties to negotiate over, not litigate in negotiability
appeals.

Id. at 17.

V. Analysis and Conclusions

The proposal in this case involves: (1) a 6 percent across-the-board
pay increase; and (2) a five-step pay scale. Insofar as the proposal seeks a 6
percent pay increase, it clearly involves an adjustment to employees' basic
rate of pay. An adjustment to the basic rate of pay constitutes "pay" within
the meaning of section 704(b) of the CSRA. SeeUSIA, 37 FLRA at
858-59. Consequently, the first portion of the proposal is governed by section
704(b).

Further, we reject the Union's argument that the portion of the
proposal providing a five-step pay scale does not concern a pay practice. It is
clear and undisputed, in this regard, that the proposed pay scale encompasses
automatic advancements between steps after expiration of certain waiting
periods. See Reply Brief at 8; Petition for Review at Section 4 of
Exhibit 1. A multi-step pay scale with automatic step advancements results in
periodic increases to an employee's basic rate of pay and involves general
compensation policies that are part of an employee's total compensation
package. Therefore, we conclude that this portion of the proposal concerns a
pay practice and also is governed by section 704(b). CompareUSIA, 37 FLRA at 861-62 (proposals concerning only the method of
compensating employees, such as payment by check or direct deposit, do not
concern pay practices under section 704(b)).

In order for a proposal that concerns pay or pay practices to be
negotiable under section 704(b), it must: (1) concern a subject matter that was
the subject of negotiations in accordance with prevailing rates and practices
prior to August 19, 1972; and (2) be in accordance with the current prevailing
rates and practices. SeeUSIA v. FLRA, 895 F.2d at 1454;
Parker and Davis Dams.

It is undisputed that across-the-board pay increases and multi-step pay
scales were the subject of negotiations prior to August 19, 1972. However,
there is nothing in the record before us to support a conclusion that the
proposed pay increase or the proposed pay scale is in accordance with current
prevailing rates and practices. In this regard, the Union contends that both
the pay scale and the pay increase are consistent with current prevailing rates
and practices. The Union offers no support for its contentions, however. That
is, the Union provides nothing to show that relevant prevailing rates and
practices include multi-step pay scales with automatic advancements or
across-the-board pay increases.

We reject, in this connection, the Union's argument that the proposed
five-step pay scale is negotiable because it is consistent with the pay scale
applicable to certain Federal employees. Nothing in the record before us
indicates that the pay practices involving such Federal employees constitute
the parties' relevant "prevailing pay and pay practices" under section 704(b).
Moreover, it appears from the record that the parties intended non-Federal
prevailing practices to be utilized as the basis for determining bargaining
unit pay and pay practices. For example, the Union states that bargaining unit
pay and pay practices should be determined by examining "similar heavy industry
business," Reply Brief at 8, "general private industry pay structures,"
id. at 10, and "Pittsburgh heavy industries[.]" Id. at 17.
Accordingly, it is unnecessary for us to determine whether, and to what extent,
the parties may include Federal sector pay and pay practices in calculating
relevant prevailing pay and pay practices.

In negotiability matters it is well established that the parties bear
the burden of creating a record upon which the Authority can make a
negotiability determination. A party failing to meet its burden acts at its
peril. National Federation of Federal Employees, Local 1167 v. FLRA, 681
F.2d 886, 891 (D.C. Cir. 1982); National Federation of Federal Employees,
Local 341 and U.S. Department of the Interior, Bureau of Indian Affairs, Wapato
Irrigation Project, Wapato, Washington, 39 FLRA 1272, 1274 (1991).
Because the record does not establish, as required by section 704(b) of the
CSRA, that the proposal is in accordance with current prevailing rates and
practices in the relevant industry, we conclude that the proposal is
nonnegotiable.(*)SeeIBEW, 43 FLRA No. 94, slip op at 9
(Authority concluded that proposal for "inequity" pay increase was
nonnegotiable under section 704(b) because the record did not establish that
such increase was consistent with relevant current prevailing pay practices).

VI. Order

The Union's petition for review is dismissed.

FOOTNOTES: (If blank, the decision does not
have footnotes.)

*/ As we conclude that the record does not support a
conclusion that a